US-based multinational retailer Walmart has sold its stake in Chinese e-commerce company JD.com to raise $3.74 billion, according to a term sheet Reuters has resulted.
The move is part of the US retailer’s strategy to focus on its own operations in China.
Walmart sold 144.5 million American Depositary Shares at a price between $24.85 and $25.85.
The sale was brokered by the investment bank Morgan Stanley.
Walmart was quoted by Reuters and said: “This decision allows us to focus on our strong China businesses for Walmart China and Sam’s Club and deploy capital to other priorities.”
Walmart, JD.com’s largest shareholder, has committed to a continued business relationship with the e-commerce company.
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By GlobalData
The partnership between Walmart and JD.com began in 2016, with Walmart initially acquiring a 5% stake.
The collaboration included JD.com’s acquisition of Walmart’s online marketplace Yihaodian.
By the end of 2016, Walmart had increased its stake to 10.8 percent. The share sale marks the end of this strategic alliance.
JD.com shares fell more than 10% in Hong Kong following the news, while its U.S.-listed shares fell 10% in after-hours trading.
Despite better-than-expected earnings reported in August 2024, JD.com’s share price has fallen significantly since the beginning of 2021.
Walmart’s China business has shown robust performance, with sales increasing 17.7% year-on-year to $4.6 billion in the second quarter of 2024.
JD.com recently reported a 1.2% increase in its net sales for the second quarter of 2024 to 291.4 billion yuan ($140.1 billion).
